Nigeria is making a major push to revive its deepwater oil industry, introducing a new rules-based incentive framework designed to attract as much as $50 billion in fresh investment into offshore oil projects. Approved by President Bola Tinubu on August 11, 2026, the new regime replaces years of project-by-project negotiations with clearer eligibility requirements and implementation timelines.
The move comes as Nigeria tries to regain ground in the increasingly competitive race for global oil capital. For years, international oil companies have raised concerns about changing fiscal terms and uncertainty around long-term investments, while countries such as Angola, Namibia and Mozambique have aggressively competed for deepwater projects. Nigeria’s oil production has also fallen from more than 2 million barrels per day at its peak to around 1.6 million barrels per day, making new investment increasingly important.
One of the projects expected to benefit from the new framework is Bonga South West, a major deepwater development that Shell has considered for almost two decades. The project could require about $10 billion, while estimates for the wider Bonga Southwest-Aparo complex have reached as much as $20 billion. Shell CEO Wael Sawan previously discussed the project with Tinubu, with the presidency saying the engagement helped drive the development of a broader incentive framework. Still, experts caution that the new policy does not automatically guarantee a final investment decision, as Shell’s board must still assess the project’s economics and other commercial considerations.
The government is also looking beyond oil production, hoping the policy will create more opportunities for Nigerian companies and workers. Qualifying projects will be expected to maximise activities within Nigeria where commercially and technically possible, potentially boosting local engineering, fabrication, marine logistics, technical services and project management. According to the presidency, the goal is to build a stronger domestic deepwater services industry and reduce the amount of major offshore work that currently goes to overseas yards and contractors.
For Nigeria, the real test will be whether the new rules finally turn years of promises into actual investment, construction and increased production. Previous incentives introduced in 2024 and cost-efficiency measures announced in 2025 were also expected to unlock stalled deepwater projects, but progress remained limited. The Tinubu administration is betting that a more predictable and sector-wide framework can change that story. If it succeeds, Nigeria could not only attract billions of dollars in capital but also create skilled jobs, strengthen local supply chains and restore its position as one of Africa’s leading destinations for deepwater oil investment.
source: Business day
